Fitch expects IBREL’s net debt to reduce to around Rs 4,800 crore by end of FY16 from Rs 5,540 crore a year earlier, and fall further thereafter. IBREL has raised funds that it plans to use to reduce debt.

Stating that the operating environment is showing signs of improvement, Fitch said that IBREL’s contracted sales were Rs 800 crore during first quarter of 2015-16 compared with Rs 550 crore in the preceding quarter and Rs 560 crore a year earlier.

During 2014-15, the company’s sales fell to Rs 2,030 crore from Rs 2,430 crore in 2013-14.

“IBREL has a land bank of about 7 million square metres, which is sufficient to support project development over the next six to seven years based on current plans,” Fitch Ratings said.

IBREL has projects across India, with significant presence in the major cities of Mumbai, Delhi (NCR) and Chennai. The housing projects also cover various categories from middle-income to luxury. This diversity mitigates risks arising from volatility in a particular category or location, the agency noted.